In January 2018, Sam Black ('SB') bought $800,000 worth of units in Luxe Ltd ('Luxe') on the basis of the information contained in the prospectus. Luxe acted as a trustee, and registered entity of a registered Managed Investment Scheme that operated a number of chinchilla farms throughout Australia.Chinchillas are farmed for their fur.Sam invested in Luxe as he believed it would provide him with a regular income stream from fully franked dividends.

At the time of the share purchase, the following information was contained in the prospectus:

• Northern Bank ('NB') had lent $8 million to Luxe in 2016, with 10% interest payable monthly and the balance due in eight years.This loan was secured by a registered mortgage over the chinchilla farms, a non-circulating security interest over all shares in Luxe, and all other assets of the company.The total of these securities was worth $12 million at the time SB purchased his shares.
• Alex, a director of Luxe, had provided his art collection as additional security for the loan from NB. The art collection is mortgaged to NB for $1 million.
• Milly lent the company $500,000 in November 2017 on the basis that she would be paid out of future profits from fur sales.She also holds $500,000 worth of units in Luxe. Milly manages one of the chinchilla farms.
• In November 2019 the board of directors of Luxe approved the following payments:
• $200,000 to Alex for a performance bonus.
• A repayment to Milly of $100,000 for her November 2017 loan to Luxe.
• $50,000 to Milly's 5-year-old daughter for her painting of a chinchilla.

At the time of these payments, the value of the chinchilla farms had doubled.Luxe began to use the $10 million NB loan to establish additional chinchilla farms.However, animal rights activists broke into some of the farms and filmed the chinchillas being cruelly slaughtered. The footage was released to social media.As a result, worldwide demand for chinchilla fur has plunged substantially.

Milly issued a statutory demand for the outstanding $500,000, which Luxe was unable to pay on 1 January 2020.Milly filed an application to wind up Luxe on 1 February 2020.

SB seeks your advice.In each of the questions below please refer to the relevant case law and legislation to support your answer. Use your own words at all times.

a)SB visited you before investing and asked you the following: "What is a managed investment scheme?"Briefly explain to SB what a managed investment scheme is,in terms of its legal structure, function and operation.

b)Milly is a shareholder of Luxe as well as an employee director. What are the legalimplications? Refer to case law and legislation in your answer.

c)What transactions, if any, can the liquidator 'claw back' as voidable antecedenttransactions?In your answer, please explain why and refer to relevant legislation.

d)What will be the likely order of payment of the funds available in the event of Luxe'sliquidation?

Please only use CORPORATIONS ACT 2001 and ASIC ACT 2001